China lifts bans on group tours to US, Japan, and other key markets.

China lifts bans on group tours to US, Japan, and other key markets.

China Lifts Restrictions on Group Tours for Key Markets, Boosting Tourism Industries

Beijing, Aug 10 (ANBLE) – In a potential boon for the tourism industries of the United States, Japan, South Korea, and Australia, China has announced the lifting of pandemic-era restrictions on group tours for these countries1. The move, which was announced by China’s culture and tourism ministry, is effective immediately. Prior to the pandemic, mainland Chinese tourists were the biggest spenders when traveling abroad, contributing a combined $255 billion in 2019. Group tours alone accounted for roughly 60% of this expenditure2. The absence of Chinese tourists since the pandemic has resulted in financial troubles for many tourism-dependent businesses around the world3.

China’s decision to lift restrictions on group tours is significant, given that these countries are key markets for global tourism. Germany and Britain are also among the countries for which restrictions have been lifted4. However, Canada, which has experienced politically fraught relations with China, did not make it onto the list5.

This is China’s third list of approved countries. The first batch, approved in January, included 20 countries such as Thailand, Russia, Cuba, and Argentina. The second batch in March included 40 countries, including Nepal, France, Portugal, and Brazil6. China has never provided an explanation for its staggered approach to approvals, but analysts speculate that countries taking longer to gain approval have faced more political and/or trade tensions with China, the world’s second-largest economy7.

The decision to lift restrictions on group tours was welcomed by Japanese Prime Minister Fumio Kishida, as well as tourism ministers in South Korea and Australia, who expressed optimism that it would provide a much-needed boost to their economies8. However, the extent to which outbound Chinese tourism will bounce back for the latest group of countries remains to be seen. Expectations of a surge in demand after the reopening of borders have so far been largely unfulfilled9.

International flights in and out of China have only recovered to 53% of 2019 levels as of July10. This is due to several factors, including staffing issues for global airlines, limited route availability, delays in visa issuance for Chinese travelers in Western countries, and a sluggish domestic economy that is discouraging Chinese tourists from big spending11.

While some Chinese online users expressed their lack of enthusiasm for international travel, citing the beauty and affordability of domestic destinations, others are more upbeat. According to Steve Saxon, a partner at McKinsey & Co, despite the cooling overall economy, 40% of Chinese people plan to spend more on travel, using the money they saved during COVID on international trips12.

The news of lifted restrictions has already had an impact, with Trip.com, China’s largest travel agency, reporting a surge in searches for destinations such as Australia and Japan13. Additionally, shares in companies with significant exposure to Chinese travel demand from the latest group of countries have experienced significant gains. This includes South Korean casino operators, with companies like Grand Korea Leisure and Paradise seeing surges of 21% and 18%, respectively14. Notably, this marks the first time since a 2016 dispute over the deployment of a U.S. missile defense system that group tours from China are being allowed on such a large scale in South Korea. China had not publicly acknowledged restricting group tours to South Korea in the past15.

In conclusion, the lifting of pandemic-era restrictions on group tours for the United States, Japan, South Korea, and Australia is a positive development for their respective tourism industries. China’s decision to expand its list of approved countries reflects the potential for economic recovery and improved relations. While the full extent of the rebound in outbound Chinese tourism remains uncertain, there are signs of optimism, with increased interest in international travel observed. It is hoped that this step will provide a much-needed boost to global tourism and facilitate closer ties between countries.

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  1. Source: Reuters↩︎

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  15. Source: Reuters↩︎